457 cancellation a boon for Australian IT professionals

Nobody does, that’s who. So, while most of the tech press erupts in horror at Malcolm Turnbull’s cancellation of the 457 visa programme, one forthright individual has stepped into the fray to adamantly state that this development is a positive one for Australia in general and for middle aged technology professionals who are struggling to find employment in particular.

Darryl Carlton is an IT probity advisor and in his view, no more 457s is good news, not bad. “While foreign multi-nationals and universities have responded with anger and disappointment, the reality for many working in ICT is that local jobs have been going to low-cost foreign workers for more than ten years. If you have passed the age of 45, it has become almost impossible to find employment, leading to a massive number of experienced professionals that are either unemployed or underemployed in the IT business,” he told iStart.

This situation, he said means that being an independent contractor has moved from being a career choice to being the only mechanism available to displaced Australian IT professionals who do not want be considered ‘on the dole’. “Contract rates have stagnated for decades [owing to oversupply].”

Moreover, the propensity for tech firms to hire low-cost 457 workers instead of local seasoned professionals has had a further upshot – lower quality work – which Carlton believes can now be turned around: “I do not subscribe to the view that ‘skilled migration’ has filled talent gaps. The total cost of ICT work has increased while employers have reduced unit cost; the rates or salaries paid to individuals has reduced, while the total numbers of staff needed to do work has increased and projects have become less successful,” he said.

The big outsourcing firms, Carlton charged, can only make money by stacking projects with an army of low-talent workers at reduced rates, and then run those projects for as long as possible. “The 457 visa scheme has enabled this practice and deprived local talent of genuine opportunity. It has led employers, both government agencies and private corporations, to demand lower prices, without consideration of the total cost or end result.”

There are ready examples where 457 visas have brought people in from overseas where surely local talent could have been found, he believes, and it isn’t just in the tech industry either. “Why did Australia need to import 118 web developers last year on 457 visas? And 101 ICT support technicians? We are graduating more than enough from our schools, and there is plenty of local talent available to do this work. Surely there are people in Australia that want to do this work. And to complain in the generic that ‘Australians will not do these jobs’ is disingenuous.”

Over the past three years, added Carlton, it appears that twenty 457 visas were granted for “driving instructors”. Twenty-four 457 visas were granted for golfers. Sixteen plumbing inspectors, and twenty-four quarantine officers, “Occupations which are licensed and controlled by Australian standards which can only be gained in Australia.”

Carlton said that while these examples might seem trivial (or indeed, bizarre – golfers?), they provide support for the Government’s position that the scheme has been abused and misused. “I would contend that a lot of that misuse has been perpetrated by Government agencies that have sought cheap labour from overseas. When it comes to ICT this certainly seems to be the situation.”

The tightening of regulations, Carlton hoped, may lead to greater opportunity for mature and experienced local hires. “Far from the headlines of youth unemployment, there is a crisis for senior members of the ICT community in Australia to which the 457 visa scheme has been a contributor.”

Questions or comments...

As a small bespoke software development company in Australia we have always hired employees first and foremost. Those employees have all been Australian citizens, there has been no need to use 457 visa’s to bring overseas people in. For us there is enough talent pool available here in Australia for us to source our new employees from.

But we also run offices overseas in the UK and the USA (this meant incorporating companies in the UK and the USA). In both those case we used the overseas equivalent of the 457 visa’s to enable us to send several highly skilled long term Australian employees over to those countries to help start up our overseas operations. This was essential because there were simply no people overseas that knew about our products, no one who was a technical expert, no one who knew how to install or support our products. Being able to utilise those 457 like visa’s overseas to facilitate our expansion into overseas markets has been essential to our success.

Yes, there is no place in Australia for a 457 visa program that is being rorted simply to employ lower cost workers from overseas.

However there is still a place in Australia for visa programs that allow global businesses to expand into the Australian market by bringing their highly skilled and highly paid workers across to Australia. Those initial foot soldiers are responsible for establishing the beach head from which a much larger company grows, a company that would employ many Australian workers as it grows. Those workers would pay tax here.

Both sides of politics are now realising that we can’t keep sending all the jobs offshore, or just bringing in overseas workers. Where are our kids and their kids going to work in Australia if there are no real jobs here?

As employers, parents and part of a larger community we must all do our part to help foster a strong economy here in Australia. A strong economy that provides a large choice of jobs to a wide variety of people, an economy where employers value their employees and employees value their employer.

A strong economy needs to be founded on an economy that makes things. We need research, design , development, manufacture, sales to happen here in Australia, not overseas.

Neither party, Labour or Liberal knows how to fix this. Billions of $ are wasted on programs (R&D Tax Concessions, Work for the Dole) that don’t seem to work. I don’t have the answer but I can see we have a big problem.

Running a business is hard work. Everyone wants a piece of you. You pay your suppliers, employees, super payments, payroll tax, company tax, office rental, insurances, electricity bills, bank fees etc and if you do a really good job you make a modest profit for all that risk that you took on. If you screw it up you can lose big time and so do your employees if you have to let people go.

The recent tax cuts for business are a good thing. They will provide us with some funds that we can re-invest into our ongoing product R&D to help us sell more product here in Australia and Overseas.

Thanks for the insightful comment Mike. I’d agree most strongly with your final statement – at least a big part of the answer lies in tax cuts for businesses as you and others like you are far better arbiters of how to spend the money you earned, than any government will be. Subsidies are bad, government grants don’t help, they hinder. Private enterprise knows how, not to make a profit, but to solve problems. Those that solve them well end up being sustainable businesses.